Womply, a Silicon Valley-based financial technology company, is alleged to have pulled in $2 billion in U.S. taxpayer dollars during the COVID-19 pandemic through defrauding the U.S. government by processing blatantly fraudulent Paycheck Protection Program (PPP) loans. An ongoing court battle over Womply’s complicity in financial fraud has now revealed that some of those tax dollars were likely passed on to one of the company’s key investors, Chinese tech conglomerate Tencent.
The Paycheck Protection Program was set up in the early days of the pandemic in an effort to prevent mass layoffs and an economic recession. The $800 billion program allowed American businesses to secure loans to keep workers on payroll despite commerce being essentially shut down by state governments. All-in-all 11 million loans were issued through PPP.
Financial technology companies like Womply served as middlemen, supposedly aiding business in filing out and filing paperwork to receive a PPP loan – with most profiting by collecting a processing fee based on the loan amount. The relatively ‘easy’ money these companies could make from processing large loans, however, became a major vector for fraud and abuse. Womply’s fraud prevention mechanisms were described by Florida-based lender Benworth as having been “put together with duct tape and gum.”
Womply’s activities raise even more questions and concerns now that it has come to light that China’s Tencent, which owns WeChat and TikTok, is one of its stakeholders. In 2020 the U.S. Central Intelligence Agency determined Tencent was backed financially by the Chinese government’s Ministry of State Security. Not only may Womply have defrauded the U.S. government, it may have ultimately helped the China profit from U.S. taxpayers at the height of the pandemic.
